Defaulted Student Loans

Defaulted student loans occur when borrowers fail to make payments for an extended period, typically 270 days or more. When a loan defaults, the entire unpaid balance becomes due immediately, and the lender may take aggressive collection actions, including wage garnishment or tax refund seizure. Default can severely impact a borrower's credit score, making it difficult to secure future loans, housing, or employment. Options for recovery include loan rehabilitation or consolidation, which can help restore loan status and improve credit standing. It’s crucial for borrowers to communicate with lenders if they face financial difficulties.